Veskimöldre II

€500,000

Target fulfilled: 100%

Closed

SummaryDetailsLocation and viewsDocuments

Introduction of the Veskimöldre Investment
Opportunity

We offer participation in a loan that
will be used to build a large, wholesome living environment in cooperation with
the public and private sectors in Veskimöldre, on the border of the Nõmme and Saue municipalities.

We offer the opportunity to participate in
financing the development of the second stage of Veskimöldre residential area,
where developer BC Arendus OÜ develops an area of ​​approximately 70 hectares.
The amount EUR 500 000 is raised for the development of infrastructure, that involves
the construction of roads, electricity, water,
and sewage. The key team members involved with the developer successfully
completed the development of the first stage of the Veskimöldre, with the
volume also about 70 hectares. In the first stage of Veskimöldre, a
comprehensive living environment with 210 residential plots, 40 row-houses and 14 apartment buildings was developed in four years. Under the second stage of the
Veskimöldre, 166 new residential plots and 127 row-house
segments will be built with a new elementary school-kindergarden, a store and
other services necessary for day-to-day living.

Terms offered:

The total investment - EUR 500 000

Interest - 10%

Interest payments - monthly

The minimum investment amount - 100 euros

Loan term - 01 November 2019

Type of loan - mortgage secured loan

Position of investors in
financing the project

The
capital above Argeld

0%

The
capital with the same ranking as Argeld

65%

The
capital behind Argeld

35%

Argeld's investors acquire 10% of the
capital with the same ranking, or 6.5% of
the total capitalization of the project. The remaining 90% of the funding in
the same ranking is held by Novira Finance OÜ.

Project developer

The owner and developer of the project are BC Arendus OÜ, which belongs to a group of
experienced real estate developers and investment management Brave Capital OÜ.
Brave Capital OÜ has been the developer and main investor of the Veskimöldre
residential area since the beginning.

Development of the living environment of
Veskimöldre is managed by development company BC Arenduse OÜ belonging to the
group Brave Capital, whose team has experience in real estate development
since 1995. During this time number of living environments, business centers,
shopping centers and apartment buildings have been developed. The Brave Capital
Development Department is run by the same people who implemented the
Veskimöldre I stage development in 1997-2005 and Merivälja2 in 1998-2003.

Location

The development project is bordered by
Laagri and Nõmme, on the one side, and Harku
on the other side. The first stage of the development of Veskimöldre is directly across the road. The new road of
Harku-Laagri, the Laagri overtake, crosses the development ground, which
ensures a very good transport connection. You can find a more detailed view of
the location on the map attached.

Business plan

The development of the second stage of
Veskimöldre covers nearly 70 hectares of land that the developer has purchased with
their own resources. The total area of ​​land to be sold is 367,000 m2, which
includes 184 plots with an average price of 65 euros/m2. The average size of
detached house plot is 1600 m2.

The funds involved in the financing were spent
on the development of the infrastructure of the plots operating as collateral. To
date, most of the infrastructure works have already been completed. Out of the entire
construction, the road construction is yet to be finished. The final completion
of the infrastructure is scheduled for November 2017.

The sale of properties has started, the total duration of
development and sales is planned for 6 years. The estimated sales pace is an
average of one unit per month, in which case the loan will be repaid within
about 3 years after the infrastructure has been completed, if two plots are
sold per month, then the expected repayment period is one and a half years.

total м2

Value

Nо of units

Avg price, eur

Avg size, м2

Detached house plots

238 001

14 703 605

159

98 682

1 597

Row-house plots

28 543

2 275 000

9

252 778

3 171

Plots for business purpose

1 777

112 500

1

112 500

1 777

Total sellable land

268 321

17 091 105

169

107 491

1 688

The loan agreement with BC Arenduse OÜ has
been concluded under the following conditions:

·
total loan
amount up to EUR 5 000 000;

·
fixed
interest rate of 10% per annum;

·
loan term 01.11.2019;

·
interest
payment monthly;

·
repayment of
the capital amount: the Borrower has an obligation to return 20 €/m2 for every
property unit sold to the customer

·
as
collateral, a first rank joint mortgage to 169 properties

·
The borrower
has the right to return the loan early, notifying thereof in advance at least
60 days

Through Argeld.com, a maximum of EUR
500,000 raised capital will be included in the financing transaction already signed. The initial
creditor Novira Finance OÜ, a subsidiary of Novira Capital, is ready to sell
10% of the total loan amount. The remaining loan of EUR 4 500 000 remains to be
financed by Novira Finance OÜ, so far 4.2 million euros of the loan has been
paid out. To date, a loan of EUR 500,000 has been transferred to a subsidiary
of Argeld specially created for this
project.

During the loan period, interest is paid on
a monthly basis.

Loan
repayment

The loan will be repaid by the proceeds
from the sale of residential plots. Each time when selling a plot to the final
customer, the Borrower has an obligation to return 20 €/m2. Latest loan
repayment date is 01.11.2019.

The Borrower has the right to repay the
loan with the incurred interest at least by 50,000 euro installments notifying
each time at least 60 days in advance.

Loan
collateral

The loan is secured by a first rank joint
mortgage totaling 169 properties to be developed at Alliku küla, Saue rural municipality, Harju county. The
total mortgage is EUR 7 500 000. The total area of ​​the cadastral unit set as collateral
is 284 958 square meters, of which one unit with an area of ​​1 777 square
meters is a commercial area and the remaining 168 are residential
areas. The collateral cadastral numbers are 72701: 001: 1567 to 72701: 001:
1735.

Financial plans

Investment plan

Acquisition
of land

1 800 000

financed

Detailed
plan and designing

800 000

financed

Roads and
infrastructure development

6 700 000

mostly
executed, 20% to be completed

Sources of capital

Equity

2 700 000

Mortgage
loan

5 000 000

Sales
prepayments

1 600 000

Sales plan

With the sales pace an average of one plot
per month, the loan will be repaid within about 3 years after completion, if
two plots are sold per month, then the expected repayment period is one and a
half years.

Risk Overview

The
following overview takes into account the total loan amount of EUR 5 000 000,
the total collateral area of 285 000 m2 and the mortgage factor of 1.5

Total loan amount 5 000 000 eur

Total sellable area 270 000 m2

Loan amount per m2 18,5 eur/m2

Mortgage per m2 27,8 eur/m2

Avg property price 65 eur/m2

LTV 28,5%

Risk matrix

Completion

Market risk

Liquidity risk

Cost overruns

•

Completion delay

•

Joining the utilities

•

Market volume

•

Price level

•

The pace of sales

•

Cost Overruns

The developer has entered into an obligation to build a
project in accordance with the budget, the budget surplus giving the lender the
right to demand early repayment of the loan.

The developer has entered into a general construction
contract with the MSM Group, joined the electricity supply with Eesti Energia
Retail Network and the water supply and the sewage have been solved with the
Kovek company in Saue. The utility
networks and roads were designed and coordinated by K-Projekt.

Most of the drainage has been established,
connection to the networks has taken place, and no significant cost overruns
for the remaining work is expected.

Completion Delays

The developer has entered into an
obligation to build a project in accordance within the timeline, overrun of the
schedule giving the lender the right to demand early repayment. Final
completion is planned in November 2017, and the delay in completion of the
remaining work is not expected.

Joining the Infrastructure

All joining and construction contracts have
been concluded (roads, water, canal, electricity, gas, telecommunications) and
are largely ready, there are no significant problems expected with the rest of
the construction or joining.

Market Volume

According to the Estonian Land Board, the
number of undeveloped residential land transactions in Tallinn and Harjumaa
totaled 103 transactions per year in 2016, plus 55 transactions of Viimsi rural
municipality, 90 in Harku, 66 in Rae and 19 in Saue.
Assuming that in Tallinn, about 1/4 of the transactions and elsewhere around
80% are suitable for the construction of private houses, the total market is
about 200 plots per year. In order to repay the loan within two years after
completion, an average of 24 plots per year should be sold, which is estimated
to be around 12% of the total market volume. Considering the existing
infrastructure and utilites plus the existence of a detailed plan, the share of
comparable transactions will increase to an estimated 40%.

Price Level

According to the Land Board, the average price
level of undeveloped residential land in Tallinn was 105.8 €/m2. This project sells
property in the price range of average 65-100 euro/m2. The sales prices of the
developments located around 10 km from the city center are between 40-70 €/m2.
The developer positions the development in the area of ​​Tallinn, Nõmme-Laagri,
where prices are predominantly in the range of 80-100 €/m2.

Liquidity risk and pace of realization. Given the relatively high,
an estimated 40% share of the estimated comparable market volume and
alternative bid prices at around 70-80 €/m2. The pace of sales depends
primarily on the potential customers' perceptions of the value proposition, the
longer period without a sale of any unit
may cause liquidity problems for developer.

Borrower

Borrower

BC Arendus OÜ

Company code

12056017

Address

Liivalaia tn 33, Tallinn 10118, Eesti

Borrower's
background

Part of an experienced real-estate
development group Brave Capital OÜ

Fundraising

Amount to be
raised

€ 500 000,00

Instrument

a share of claim against Borrower which
is obtained via the Argeld portal

Minimal
investment

€ 10

Paybacks to
Investor

Funds received from Borrower will be
allocated to investors proportionally according to investment volume